Mortgage FAQ’s
There are lots of common questions that people have regarding their mortgages. How to get a mortgage, what they need to qualify for a mortgage, and about specific concerns they have about the application process for a mortgage. Here are some of the most common questions and their answers.
Q: What is a mortgage?
A: Generally, a mortgage is a loan obtained for the purchase of a property. The “mortgage” itself is a legal claim on the home or property that secures the promise to pay the debt. All mortgages have two features in common principal and interest.
Q: Are there special deals available for first time buyers?
A: Yes. Most lenders now offer special affordable mortgage deals which are designed to help first-time buyers, with the purchasing of there first home. With deposits as little as 5% Lenders are helping borrowers who don’t have a lot of money saved for the deposit, or have no or a poor credit history. There are also options to help first-time buyers who have experienced income irregularities.
Q: If my credit is poor can I still qualify for a mortgage?
A: Yes of course, a mortgage can be obtained by people with all sorts of credit history (prime, good, Average, Below Average, and Poor Credit). The rates will increase accordingly to your credit score. So, if you have a low credit score we will still be able to obtain a mortgage for you. Also, with a lower credit score you may be limited to less mortgage loan deals than you would with prime credit. Sometimes compensating factors such as a lot of money put away in savings accounts, or investments, etc…, low LTV (loan to value), low DTI’s (debt to income ratios), and lower terms (15 year instead of a 30 year) may help to compensate somewhat for a lower credit score and qualify you for a better mortgage rate.
What factors effect mortgage repayment?
First the amount of the deposit, the amount you wish to loan, the interest rates, the repayment term and payment schedule will all affect your monthly mortgage repayments.
Q: What mortgage terms are available for me as a borrower?
A: You can choose from any loan term that you wish. The most common loan terms are 5, 10, 15, 20, 25, and now even 30 year home loan terms. the 30 year loan term is still relatively new to the market but the rest have been around for quite some time. Overall the lower the term you choose, the lower the rate can be for you. The 25 year mortgage term is the most common loan term used for home mortgage.
Q: What activities do Mortgage Brokers/mortgage advisers engage in?
A: Mortgage brokers/mortgage advisers are persons (other than a mortgage lender or bank) who, in return for commission:
arrange for a mortgage lender to provide a consumer with a mortgage loan; and/or
introduces a consumer to an intermediary who arranges for a mortgage lender to provide the consumer with a mortgage loan.
Do I require an authorisation to become a mortgage broker/mortgage adviser? Yes, all of mmi mortgage brokers are authorised by the financial services.
Q: What is the best mortgage available for me?
A: there are almost 5000 mortgage deals available for borrower today. We will assess your situation and provide the best options for you and your circumstances. We have many programmes, a simple fixed rate mortgage, interest only, pay option, lot loans, construction, rehab, manufactured, commercial and many other options to fulfill your lending needs.
Q: Can I still get a mortgage after a bankruptcy?
A: You may be able to qualify for a home loan even if you have a prior bankruptcy. The best way to find out if you can qualify for a mortgage after a bankruptcy is to speak with our senior mortgage broker and discuss your options.
Q: Can I have a second mortgage?
A: The first mortgage loan secured equity or ownership interest you have in your home. Contact your mmi mortgage broker today and discuss the possibilities of a second mortgage secured on the same property or a buy to let mortgage as an investment opportunity.
Q: What is APR?
A: APR, or Annual Percentage Rate, it is the rate that takes the lender charges into consideration, the total of all costs in the form of an interest rate. Because there are always other charges in addition to the rate (the interest rate base on which payments are calculated), the APR is almost always higher than the bank rate. The APR is one of the items required by the lender to disclose to every potential borrower (client).
Q: does mmi brokers have the lowest rates?
A: as we mentioned before there are literally thousands of deals available to fit just about every circumstances with rates that are competetive with anyone. Playing the rate game in the mortgage world can get quite frustrating. Many lenders advertise rates that are simply not available just to get you to talk to them and get you in the process with them. The fact is that mortgage money that all lenders lend comes from the same sources. There is never one lender that will have significantly lower rates than another. Rather than choosing a lender based on whoever can sort out the lowest rate, why not choose on the facts of the mortgage brokers advice, experience and skill in finding a mortgage deal best suited for your particular circumstances. Doing it this way will get you the best mortgage deal available with a competetive rate and a borrowing process that is stress free.
Q: I am self-employed or I have other income that is difficult to prove. Is there a mortgage deal for me?
A: Yes. Depending on your circumstances credit history, deposit, and other factors your mmi mortgage broker will be able to help you whatever your circumstances are.
Q. What is Loan To Value (LTV)?
A: LTV is the percentage of your mortgage in proportion to the value of your home. For example, if you are buying a home for £120,000, and you have a deposit of £15,000, then your loan amount would be £105,000. Your LTV would be 90% (the mortgage is 90% of the value).
Q: I applied for a mortgage online with a mortgage comparison websites and now receiving 20+ phonecalls from them a day
A: Online mortgage comparison websites are not mortgage broker company at all. The are lead generating websites, they collect your information and sell it to the highest bidders often several times. But do not worry mmi brokers are a whole of market mortgage broker, we are independent and we do not sell your information to second or third parties we protect your personal information to the best of our ability.
Q: Why should I buy instead of renting?
A: A home is probably your biggest investment. When you rent you are literally throwing money in the bin or essentially paying your landlord’s mortgage. When you own your home, you have a valuable asset, hopefully making you richer as the value of your home increases over the years.
Q: What does my mortgage payment include?
A: For the majority of home owners, the monthly mortgage repayment includes two separate parts :Interest and capital repayment on the amount borrowed. Other mortgages can be ‘Interest only’ repayments to the lender for the amount borrowed.
Q: by paying interest only on my mortgage, will it save me money?
A: Over the last couple of years we have seen a steady increase in interest only options on mortgages. Considering the payment will be lower during the interest only period, it will increase following that period and actually be higher than your normal mortgage repayments. If this is also coupled with an interest rate that adjusts, your new repayments can be significantly higher than the payment you have currently. If you do not expect to remain in your home longer than the interest only period, then you may benefit from the lower initial repayments, as long as your home value remains stable so that you are able to sell or remortgage in the future.
Q: Can I pay off my mortgage ahead of schedule?
A: Yes. By making extra payments, you can accelerate the process of re-paying your mortgage. Most lenders allow loan prepayment, though you may have to pay a prepayment penalty to do so. Ask your mmi mortgage broker for more details.
Q: Who are mortgage lenders?
A: A mortgage Lender is a financial institution that provides possible homeowners with the funds they need to purchase a property over a long-term period to to repay their mortgage loans. Borrowers are required to pay monthly installments to their lender which includes principal and interest.
If you have any other question feel free to ask a mmi mortgage broker by calling o2o7 193 3966 or leave your contact details below and one of our dedicated mortgage advisors will be in touch promptly.
